Fed Awaits Crucial August Inflation Data Ahead of Rate Decision

The Federal Reserve is awaiting August consumer price data as it prepares for its September 15 and 16 meeting on interest rates.

Economists expect headline U.S. consumer price inflation to remain at 3.4 percent in August, unchanged from July, while core inflation is expected to slow to 2.4 percent.

Analysts at Barclays attribute the elevated headline inflation to higher oil prices amid the U.S. war in Iran, but the Fed will focus on core inflation as it is within its control.

The August inflation report could shape whether officials keep borrowing costs unchanged or move ahead with an increase after stronger-than-expected payrolls data.